Turkish banks will support new economic model with low rates, says association chief


A logo of the Central Bank of Turkey is pictured at the entrance to its headquarters in Ankara, Turkey, October 15, 2021. REUTERS/Cagla Gurdogan

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ISTANBUL, Dec 2 (Reuters) – Turkish banks will support a “new economic model” based on low interest rates championed by President Tayyip Erdogan, Turkish Banking Association chairman Alpaslan Cakar said, adding efforts to get banks to inject capital to support credit growth were underway.

Under pressure from Erdogan, the central bank cut rates to 15% from 19% since September, while Erdogan said Turkey would prioritize growth, jobs and investment. The lira has plunged to record lows against the dollar in response, losing around 45% of its value this year.

Speaking during an interview with broadcaster A Para, Cakar said the pound would return “to the level it deserves”, adding that banks had great potential to increase lending and he hoped banks public and private would be aligned on prices. He said efforts were underway to raise capital.

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Reporting by Ebru Tuncay and Ece Toksabay; Written by Tuvan Gumrukcu; Editing by Kirsten Donovan

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